Norwalk gas station pays fine for alleged price gouging

NORWALK -- The owners of the Shell gasoline station at 307 Connecticut Ave. has paid a fine of $1,449 to settle allegations of price gouging in the wake of Hurricane Sandy.

The owner did not admit to wrongdoing, but did sign an agreement with Connecticut's Department of Consumer Protection and pay the fine for complaint resolution, education and enforcement programs. The station's owner, Chestnut Petroleum Distributors of New Paltz, N.Y., also agreed to comply with the state's anti-profiteering law that protects consumers from price increases during emergencies and disasters.

The Department of Consumer Protection found that the station raised its gasoline price by 10 cents per gallon on Nov. 1 -- three days after Hurricane Sandy hit the East Coast -- without there being an increase in wholesale gas prices that day.

The accusation of price gouging surfaced at a time when thousands of New York and New Jersey residents lined up at Connecticut gas stations to fill up their vehicles and gas cans. Power outages and distribution difficulties crippled gas stations in New Jersey and New York City. On Monday, Nov. 5, that Shell station charged $4.45 for a gallon of regular unleaded gasoline. The credit price was $4.55. An unofficial census of Norwalk gas stations on that day conducted by The Hour, found that the majority of stations priced their gasoline between $3.95 and $4.05. The second-highest price was $4.29 at the Shell station at 128 Connecticut Ave.

"Given that the state was in a period of abnormal market disruption due to the severe impact of Storm Sandy, we determined that the Shell station's 10-cent per gallon increase was not justified and constituted an unconscionably excessive price for gasoline," Consumer Protection Commissioner William M. Rubenstein said in a statement on Thursday. "The retailer sold 4,830 gallons of gasoline that day at the increased price, but we are requiring him to disgorge three times the amount of that unfair profit."

According to the Department of Consumer Protection, when the state issues a statutory notice of an abnormal market disruption, "dealers are prohibited from charging unconscionably excessive prices for energy resources such as heating oil, gasoline, propane, natural gas, electricity and wood fuels, among others. Violators are subject to penalties."

"Connecticut will not tolerate unfair pricing from those who would take advantage of the misfortunes of others in times of disaster," Rubenstein said. "Furthermore, would-be profiteers will not profit from their actions; the monetary payment in this case is triple the amount of the excess profit extracted by the price increase."

Rubenstein cited the work of inspector William Timko and supervising inspector James Turner for their work on the investigation.